Buyers in cancelled projects can move court

Can seek cancellation of contract and refund of installment

A case relating to a property cancelled by Dubai Land Department can be taken to courts, according to a legal principle delivered by the Court of Casssation, following an appeal by Dubai Prosecution.

The Cassation Court stated cancellation of contracts should be reached amicably or judicially and that the role of the Land Department in any dispute between a developer and a buyer is limited to trying to settle it amicably and offering advice to involved parties.

“Complainants can seek judicial ruling from the courts for cancellation of contracts if one of the parties fails to fulfill contractual obligation(s) and on the issue whether the developer has the right to make deductions from the paid [escrow] amount following the cancellation," according to the sentence of the Cassation Court.

The Court of Appeal had turned down a case based on an administrative decision taken by the Land Department on the cancellation of a unit as the developer failed to register with the department.

The buyer, an investment company, filed a case with the court asking for the cancellation of the contract and the refund of the already paid amount - which was more than Dh7.5m from a total contract valued Dh49,574,760.

The First Instance Court turned down the case so the buyer appealed before the Court of Appeal.

The Court of Appeal also turned down the appeal and rejected the case stating that the Land Department had issued an administrative decision which allowed the cancellation of the unit  - subject of the case from the provisional registration.

Then the buyer applied to the Dubai Attorney General for appealing before the Cassation Court, since the company’s appeal was turned down as the legal period specified for appealing was over.

Chief Civil Prosecutor Tareq Ahmad Al Naqbi studied the appeal and found that the ruling of the Appeal Court included a violation of the law and had mistaken its implementation as it was based on the administrative decision of the Land Department and considered it as a ruling.

Accordingly, the Court of Appeal found no need for hearing a case that had been judged by the Land Department.

The report prepared by Al Naqbi was submitted to Dubai Attorney General Issam Issa Al Humaidan who approved the appeal and submitted it before the Cassation Court for the favour of the law and in implementation of Article No. 174 of the Civil Procedure Law. 

The Cassation Court approved the Appeal of the Attorney General and referred the case to the Appeal Court again.

(Home page image courtesy Shutterstock)

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